Once we sort out macroeconomic issues, opportunities will emerge from every sector – Muda Yusuf

The Chief Executive of the Center for the Promotion of Private Enterprise (CPPE) Dr Muda Yusuf, has said that once the Nigerian government sort out Nigeria’s macroeconomic issues, opportunities will emerge from every sector of the economy.

He stated this recently while speaking at the Nairametrics Q2 2023 Economic Outlook Webinar themed Fostering Economic Resilience: Harnessing Opportunities for Development.

Dr Yusuf said he expects that once the government gets critical bottlenecks to investment such as fuel subidy out of the way, it will have a medium and long-term strong macroeconomic impact in terms of stability of the macroeconomic environment. He said:

“If we get all the macroeconomic issues out of the way a lot of opportunities will arise for SMEs, for medium scale companies, for large companies, for domestic companies and foreign investors, whether they are a portfolio of FDIs.

“So if we can remove those barriers, a lot will also happen in the economy. For me, it is critical to first of all do the heavy lifting structurally, policy-wise, regulation-wise, and institution-wise. Once we remove those barriers, we have the investors that can make things happen across all sectors.”

Concerns of insecurity on segments of the economy

Speaking about security, he said the risk of investment is correlated to the risk in the environment. He stated that insecurity has affected major segments of the economy.

“Agriculture accounts for about 24% of Nigeria’s GDP. We know the impact of insecurity on agriculture – it has practically crippled the agriculture sector. The sector could do much better. We know the implications of that for food inflation, and we know the implication of inflation on poverty.

“Then again insecurity implies the perception of the country as an investment destination. Perception matters a whole lot, but it’s not all the time that perception reflects reality because anybody watching Nigeria from afar, with all the stories that emanate from here is enough to scare investors.


“What you then have ultimately is only investors with high-risk appetite; those with average risk appetite may just run away because they can’t even stand that kind of economy; that is why what you find around here are mostly Asian investors whose risk appetite is very high,” he added.

He noted that if we have a much better environment as far as security is concerned, we would be able to attract a lot more investors, especially from the West, but cautioned that they don’t have that kind of risk appetite.

The need for a good defense budget

He also stated that due to insecurity the country’s defense budget is gulping. He added that it’s good to have a good defence budget, but the gains would deprive other viable sectors of the economy because of insecurity.

“So, generally, I think insecurity is a major problem for the economy that is affecting the capacity of the economy to grow; it’s making it difficult for us to attract investment and it’s not just about insecurity in terms of killing and all of that; it’s also about oil theft and the insecurity in the oil-producing area, which has done a lot of damage to the economy.

“We are losing about N400 billion every month to oil theft. And this has been going on for close to a decade. It’s only recently that the government woke up and decided to take some concrete actions.

“We hope that that is sustained, but we know how many value investors we have lost in that sector; practically all the oil majors have left the sector, and these are the companies that have the capacity and the muscle to make a difference in terms of investments in the sector, and we know the impact of that on our revenue and our foreign exchange and our foreign reserves,” he stressed.
He said the macro issues are the most critical, but also said the country needs a better trade environment and policies.

“Trade is very critical to the development of any economy. There are a whole lot of issues around trade policy and trade institutions and the international trade ecosystem; the problem with the ports, documentation, and multiple checkpoints, all those issues are very critical, especially for those who are in the real sector of the economy.